Consumer Search and Choice Overload

Volker Nocke and Patrick Rey

No 16440, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We consider a multiproduct seller facing consumers who must search to learn prices and valuations. The equilibrium features choice overload: the larger the product line, the fewer consumers start searching. We provide conditions under which the seller offers too much or too little variety. We then allow the seller to position products or make recommendations, thereby introducing the possibility of directed search, and show that the seller may find it profitable to maintain some noise. Finally, we study the seller's incentive to disclose product identity and extend our analysis to that of a platform choosing which sellers to host.

Keywords: Sequential consumer search; Product variety; Choice overload; Multiproduct firm; Platform (search for similar items in EconPapers)
JEL-codes: D42 L12 L15 (search for similar items in EconPapers)
Date: 2021-08
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16440 (application/pdf)

Related works:
Working Paper: Consumer Search and Choice Overload (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:16440

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16440

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().